Berrett-Koehler Discussion Guide for
The New Management
Bringing Democracy and Markets Inside Organizations
by William E. Halal
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1. Is your organization still a top-down hierarchy?
The main message of The New Management (TNM) is that despite all our recent advances in empowerment, networks, teams, and other innovations, most organizations remain top-down hierarchies adorned with a few gentle touches and good intentions. As Chapter 1 shows, only fundamental change based on our most powerful principles of democracy and free markets can transform institutions, as many truly progressive companies have done. Think about the organizations you work with, and ask yourself if they use principles of free enterprise to structure their work or are they still hierarchical? Do they invite democratic sharing of power among all stakeholders or is authority still wielded by executives?
2. The transforming power of the knowledge revolution
The recent rise of knowledge as a central focus in business should change all this because the Knowledge Revolution introduces new laws of economic behavior. The complexity of a knowledge-based global economy can only be managed with entrepreneurial freedom -- both in national economies and organizations. And cooperation has now become economically efficient because knowledge increases when shared. Do you fully understand the implications of these profound changes from a capital-driven past to a knowledge-driven future? If not, read the new Introduction to the paperback edition of TNM.
3. Simple but powerful ways to create internal enterprise
Consider 3 simple steps that are being used in progressive firms to liberate entrepreneurial energy:
1. Link resource allocations to value created by internal units
2. Allow units almost total operating freedom, including the right to buy and sell both inside and outside the firm
3. Let units handle their own staffing rather than impose layoffs -- "self-sizing" instead of downsizing. If you can't imagine the implications, look over Chapter 2 and then discuss with others.
4. Simple but powerful ways to create corporate community
Now consider the following similar steps to introduce democracy, as Ch. 3 shows how many other firms have done:
1. Invite responsible representives of all stakeholders to seats on the board and other governing bodies
2. Develop performance measures that reflect contributions and rewards of these groups
3. Use this democratic form of goverance to engage all stakeholders in joint problem-solving.
5. Capitalism becomes democratic enterprise
Now think about the unusually powerful impact of these changes. If corporations engage their stakeholders in problem-solving, they will be more productive even while they serve social needs better. This type of economic system is no longer "capitalism" because it goes beyond making money -- yet it depends more strongly on free enterprise because we also need to extend markets inside the firm. How would you describe this powerful new economic system that permits even greater free enterprise yet serves all social interests? To see my answer to this question, read the Introduction and Chapter 10.
6. Exercises in enterprise and democracy
To get a first-hand, realistic experience in how these transforming principles would work and feel in action, use the two simulation exercises I've provided in the Appendix. The "Organization Exercise" will give your group the flavor of working in hierarchical versus organic systems, and the "Stakeholder Meeting" will help you grasp the reality that any organization is a political system composed of five interests that must be unified. These two simulations always work beautifully, leaving participants with a new view of reality.
7. Survey your organization
Carrying this line of self-examination further, use the survey in the Appendix to diagnose your organization. Make Xerox copies of these few pages from the book (Berrett-Koehler and I waive our royalty fees gladly) and have them filled out by a dozen or so people. Then aggregate the results and compare them with my results from 426 managers around the world as reported in TNM. Finally, convene a meeting of those who completd the survey to discuss what can be learned. Do this, and your organization will never be the same.
8. Look for examples of the new management in daily life
The Conclusion to TNM tells a short story about how I found myself living these principles when I set out to transform a park across from my home. Look this story over, and see if you can find examples in your daily life that support these ideas. If you find instances when they were not used, what can you do to bring the power of free enterprise and democratic governance into your everyday affairs? The point is, TNM is not something that will remain restricted to big corporations. It should in time alter all aspects of our culture: schools, cities, medical care, and even religion.
9. Give me a call or email
I always like to hear from readers, so give me a call or send an email message if you have a question, problem, or idea to share. My mailing address, phone numbers, and email address are in the appendix. I'd love to hear from you.